Management Seminars: Ajit Nayak (University of Exeter)
Ajit Nayak (University of Exeter)
G.15, 15-19 Tyndall's Park Road, BRISTOL BS8 1PQ
Title: Non-Cognitive Microfoundations: Understanding Dynamic Capabilities as Idiosyncratically Refined Sensitivities and Predispositions
The dynamic capabilities framework has become important to our understanding of how firms adapt to fast changing environments. However, tensions exist in the literature surrounding the idiosyncratic, tacit and hence inimitable nature of dynamic capabilities. The literature struggles to explain in cognitivist terms how such unique firm capabilities are acquired and how competitive advantage is sustained. In this paper, we develop a non-cognitive approach to understanding the idiosyncratic development of firm capabilities. We argue that a firm’s dynamic capabilities rest upon a tacitly-shared substrate of capabilities that precede cognitive representation. These microfoundational capabilities enable a firm to take effective adaptive actions in highly volatile environments without necessarily relying on explicit rules, analytical processes or any form of symbolic representation. They comprise a refined empirical sensitivity to environmental affordances and a set of collectively-shared predispositions which orients a firm’s responses to external challenges in a manner unique to its history and outlook. Together they provide the tacit know-how enabling organizational members to initiate improvisatory responses to rapidly changing environments and to capitalize on the opportunities arising therefrom.